Europe the 'Largest Emerging Market' in the World: Carlyle CEO

With billions of dollars' worth of distressed assets in its banks waiting to be snapped up by more intrepid investors, Europe is one of the "largest emerging markets" in the world, according to the chief executive of global private equity firm The Carlyle Group.

David Rubenstein told CNBC on Wednesday that, outside the U.S., the best markets to invest in were to be found in emerging markets such as China, Brazil, Peru, Chile, Nigeria…and Europe.

"Europe, we think, has a lot of appeal. It's been beaten down so much that we think it's like the largest emerging market in the world because prices have been beaten down and we expect growth to occur there," he told CNBC in Davos where he is attending the World Economic Forum (WEF).

He said investors were likely to see really cheap prices for some banking assets.

"I hope these are fire-sale prices, they're probably not going to be that cheap. The banks can't sell everything they have on their books at the prices they would probably get for them, as that would cause them difficulties. But they will sell some assets and we think it's a good opportunity."

European banks have been shedding assets as they seek to shrink their balance sheets. The Carlyle Group, bought investment management firm TCW – albeit an American asset -from French bank Societe Generale in 2012.

"We got a very good price," Rubenstein told CNBC.

Europe: the Largest Emerging Market in the World?

David M Rubenstein, co-founder and CEO of Carlyle Group, tells CNBC that Europe is looking attractive again for private equity deals as the prices have been beaten down so much it is like the 'largest emerging market in the world'.

"People are now pretty happy" with Europe's progress, Rubenstein told CNBC, as the euro seems stable and the borrowing costs of struggling countries such as Spain and Italy had declined after the ECB's proposed a sovereign bond-buying program, called Outright Monetary Transactions (OMT).

"I think the ECB had done a fantastic job and that Europe is in a reasonable state," he said, though he emphasized that any economic improvement was due to expectations for Europe being so low.

"The bar is so much lower. Expectations of what Europe would do have lowered so much that now, given where Europe is, it actually looks pretty good," Rubenstein said.

"[But] if you came from Mars and looked at Europe's financial situation you'd say "this is a problem" but given what the expectations are - that Europe won't grow very much - people are now pretty happy."

CNBC's Maria Bartiromo reports from Davos, Switzerland, at the World Economic Forum, where CNBC will be interviewing some of the biggest names in business. She will be talking to George Soros, Jamie Dimon, Bill Gates and others.